Nueces County Judge Loyd Neal pushed back Tuesday against claims from one of the candidates running to replace him that the county was "broke."

Neal held a 20-minute press conference outside his office at the Nueces County Courthouse to give an update on the county's financial situation. The event came several days after Democrat Barbara Canales — who is running against Republican Mike Pusley to fill the county judge seat — said in an interview with local television station KIII the county was "broke."

The comment came after Canales stated her priority was addressing the county's financial issues, criticizing the commissioners court for adopting a tax increase because "we (the county) are broke."

"No, the county isn't broke — the county's in good shape," Neal said. "No broke county has a AA bond rating, let me tell you that."

"And when you say that, you need to be careful, because our debtors and our bondholders and all see the headlines — 'Nueces County bankrupt,' 'Nueces County broke,' " he continued. "Neither one is true. But it sends a message to the bondholders and others, 'Whoa, we need to look at this.' "

The AA bond rating Neal mentioned was given by Standard & Poor's last month, which was a downgrade from the county's prior AA+ rating. The reason for the downgrade was S&P analysts "no longer consider the Corpus Christi MSA's economy broad and diverse."

S&P analysts also pointed out concerns with the county's continual drawing down of its fund balance — which is meant to help the county operate during an emergency, like a natural disaster — because of operating deficits over the past few years. Neal blamed those on rising health insurance costs that he opted for the county to absorb from its fund balance.

As a result, the county's reserves are not at the preferred level of 25 percent of operating expenditures. The fund balance is projected to get over 21 percent after last fiscal year is audited, and Neal has said the county needs to build on that.

The county is still feeling the impact of Hurricane Harvey, Neal added, since Port Aransas was devastated. A series of budget cuts and a 1.3-cent tax increase helped balance this year's budget before it was adopted.

"The county commissioners court has been completely aware of what we need to do to bring down the cost of government," Neal said. "And you do this by taking a hard look every year at your tax rate."

Neal pointed out the commissioners court had dropped the tax rate nearly about 12 cents since the 2004-05 fiscal year, when it stood at $0.430 per $100 valuation. The rate had dropped to a low of $0.308 in the 2016-17 fiscal year, which remained in place the next year, but was increased to $0.313 for 2018-19 in order to help build up the county's reserves.

It was under a Democrat-controlled commissioners court that the rate was increased to $0.430 per $100 valuation, but it began falling in subsequent fiscal years to $0.371 the year before Neal took office. In subsequent years, including after the court turned to a Republican majority after Pusley took office in 2009, the rate stayed relatively flat at $0.355 before dropping to $0.308 by the 2016-17 fiscal year.

It's worth noting that in some instances the tax rate, while unchanged, was higher than the effective tax rate. That latter rate allows a taxing entity to generate roughly the same amount of revenue as the prior fiscal year — anything above that would result in a tax increase for property owners whose values had gone up and, subsequently, more revenue for that governmental body.

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Nueces County Judge Loyd Neal addresses the media on the county's financial status during a press conference on Oct. 30, 2018.(Photo: Tim Acosta/Caller-Times)

Counting in the Nueces County Hospital District tax rate, the county's combined tax rate has fallen from $0.655 in the 2004-05 fiscal year to $0.431 this year.

Neal said the county's biggest problem has been a lack of growth, though its hands are tied on how much it can do to bring in new business, except work with other entities to attract new investment. The county has done what it can, he said, with tax abatements, but that can only help so much.

"The (Corpus Christi Regional Economic Development Corp.) doesn't like for me to talk about this — the problem we have in Nueces County is we're not growing," Neal said.

"We've had good, steady growth," he added. "If this county is going to continue to function like it needs to function, we have to grow, and we're all working to try to do that."

Pusley, whom Neal has openly endorsed for the county judge seat many times, was in attendance at Tuesday's event but did not speak. He did ask questions to Neal about the increased health care costs that led to the fund balance being impacted, which was a result of "severe" medical claims over a three-year span, the judge said.

Canales did not attend, but representatives with her campaign were at Neal's press conference. Canales later released a statement saying even after hearing Neal's address, she stood by her prior comments about the county's fiscal situation and its needs.

“Today, Judge Loyd Neal detailed several of the reasons that support my run to be your next Nueces County Judge," she said in her statement. "After listening carefully to the judge’s financial update, I stand by my claim that Nueces County is in bad fiscal shape."

“We all agree that the county has not grown its tax base, and that this hurts our revenue stream. We all agree that the county’s cash reserves are not what they should be," she continued. "We all know that there is a hiring freeze in place and that county services have been cut because of our financial issues. We all agree that other counties have passed us by."